American jobs data are worse than we think
By Mohamed El-Erian
Published: July 2 2009

(...) The US faces a material probability of both a higher Nairu (in the 7
per cent range) and, relative to recent history, a much slower convergence
of the actual unemployment rate to this new level. This paradigm shift will
complicate an already complex challenge facing policymakers. They will have
to recalibrate fiscal and monetary stimulus to recognise the fact that
"temporary and targeted" stimulus will be less potent than anticipated. But
the inclination to increase the dose of stimulus will be tempered by the
fact that, as the fiscal picture deteriorates rapidly, the economy is less
able to rely on future growth to counter the risk of a debt trap. (...)
http://www.ft.com/cms/s/0/1e06911c-6719-11de-925f-00144feabdc0.html

You can compare this to what I wrote in the context of the Abba Lerner
symposium in RRPE, in 2006:

"If the observed number of long-term unemployed rises, despite low
inflation, the "natural rate of unemployment" must also increase. All one
can then conclude is that it nowadays takes more unemployed people to keep
prices stable. Thus, the NAIRU provides the perfect justification of a
permanent "reserve army of labor" as necessary and inevitable."